Another terrific paper from Steven Levitt – this one coauthored with Roland Fryer, one of America’s top young economists. They’ve turned their attention toÂ the economics of the KKK.

Hatred and Profits: Getting Under the Hood of the Ku Klux Klan
Roland G. Fryer, Jr, Steven D. LevittÂ
The Ku Klux Klan reached its heyday in the mid-1920s, claiming millions of members.Â In this paper, we analyze the 1920s Klan, those who joined it, and the social and political impact that it had.Â We utilize a wide range of newly discovered data sources including information from Klan membership roles, applications, robe-order forms, an internal audit of the Klan by Ernst and Ernst, and a census that the Klan conducted after an internal scandal.Â Combining these sources with data from the 1920 and 1930 U.S. Censuses, we find that individuals who joined the Klan were better educated and more likely to hold professional jobs than the typical American.Â Surprisingly, we find few tangible social or political impacts of the Klan.Â There is little evidence that the Klan had an effect on black or foreign born residential mobility, or on lynching patterns.Â Historians have argued that the Klan was successful in getting candidates they favored elected.Â Statistical analysis, however, suggests that any direct impact of the Klan was likely to be small.Â Furthermore, those who were elected had little discernible effect on legislation passed.Â Rather than a terrorist organization, the 1920s Klan is best described as a social organization built through a wildly successful pyramid scheme fueled by an army of highly-incentivized sales agents selling hatred, religious intolerance, and fraternity in a time and place where there was tremendous demand.

This reminds me of my favourite KKK quote, from Robert Putnam’s Bowling Alone.

When Floridians objected to plans by the Ku Klux Klan to “adopt a highway,” Jeff Coleman, grand wizard of the Royal Knights of the KKK, protested, “Really, we’re just like the Lions or the Elks. We want to be involved in the community.”

One Response to Klanonomics

He made some interesting points, and the rather strongly worded conclusion: “dodgy use of interesting data in order to partially reinvent the wheel, hyped to the sky as definitive and rigorous. Freakofreakinomics.”